State Waiting for Final Carbon Rule, Hopeful for Reduced Burden

With the Environmental Protection Agency expected to release its final rule on carbon emissions next week, Arizona officials and utility representatives are hoping for a bit of relief.

The draft of the EPA’s Clean Power Plan called for Arizona to reduce its carbon emissions by 52 percent by 2030, the second-highest percentage reduction of any state. Under the proposed rule, the majority of the reduction would need to be met by 2020.

Nationwide, the EPA’s overall goal includes a 30 percent reduction in carbon emissions by 2030 from 2005 levels. Arizona wants its 2030 goal to be 34 percent, which is more in line with neighboring states, according to DEQ.

The EPA’s assumptions for Arizona include a 77 percent expansion in natural gas to meet the 52 percent reduction in carbon emissions, as well as a 10 percent increase in use of solar, wind or nuclear power, and a 13 percent increase in energy efficiency.

Since the proposed rule was announced, Arizona agencies, utilities and consumers have sent thousands of comments to the EPA saying the rule unfairly affects the state and would negatively affect electrical reliability and affordability.

Predictions from utilities and state officials are grim, if the EPA doesn’t budge on the rule. Nearly all of the state’s coal plants would be shuttered. Electricity rates would shoot up. Grid reliability would plummet, potentially leading to brown-outs.

TEP, UES Name New Leaders of Operations, Public Policy, Customer Service

TEP, UES Name New Leaders of Operations, Public Policy, Customer Service

TUCSON, Ariz.--(BUSINESS WIRE)-- Tucson Electric Power (TEP) and UniSource Energy Services (UES) have named new leaders to oversee transmission and distribution (T&D) system operations and engineering, public policy and customer service.

PINNACLE WEST REPORTS 2015 SECOND-QUARTER RESULTS

PHOENIX – Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders of $122.9 million, or $1.10 per diluted share of common stock, for the quarter ended June 30, 2015. This result compares with earnings of $132.5 million, or $1.19 per share, in the same 2014 period. For both the 2015 and 2014 second-quarter periods, net income is the same as on-going earnings.

Mild weather, led by one of the coolest Mays on record, was a primary driver for lower quarterly results and reduced earnings by $0.06 per share compared to the year-ago period. The average high temperature in the 2015 second quarter was 94.2 degrees, while the average high temperature in the same period a year ago was 96.4 degrees. As a result, residential cooling degree-days (a measure of the effects of weather) were 9 percent lower than last year’s second quarter.

“Weather aside, we achieved results within our guidance range,” said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt. “Our employees have demonstrated an ability to consistently control costs by keeping operations and maintenance expenses flat, while still providing top-tier reliability and customer service.”

As examples of the company’s operational excellence and quality customer service, respectively, Brandt cited the Palo Verde Nuclear Generating Station and the 2015 J.D. Power Residential Customer Satisfaction Study. For the third consecutive year, a refueling outage at Palo Verde was completed in less than 30 days. In the recent J.D. Power residential survey, APS improved its score in all six of the study’s key categories and ranked in the top quartile among 54 large investor-owned utilities.

State Utilities Set to Meet Goal of 6% Renewables in 2016

The state’s regulated electric utilities are on track to meet the goal of 6 percent renewable energy use by the end of 2016, largely through utility-scale and rooftop solar projects.

In 2006, the Arizona Corporation Commission approved the Renewable Energy Standard and Tariff (REST), a rule that requires regulated electric utilities to generate 15 percent of their energy mix from renewable resources like solar, wind and biogas by 2025.

The rule steps up the amount each year, starting at 1.25 percent in 2006 and gradually moving to 15 percent. From 2016 forward, the amount will increase by 1 percent each year until it reaches 15 percent.

Of the percentage required to come from renewables, a part must come from distributed generation sources, which typically comes from rooftop solar, both commercial and residential.

Arizona Public Service will double the 6 percent requirement. APS expects that 12 percent of its retail sales will come from renewables by the end of 2015, a requirement set for the utility in its rate case settlement in 2009.

The utility credits its “diverse resource portfolio and the current volume of interconnection applications for distributed generation” for exceeding the goal.

New EPA Clean-Air Rules Threaten Rural Power Co-ops

Our View: Coal is on the way out, but the feds need to acknowledge economics.

By this fall, the federal Environmental Protection Agency is expected to march the nation’s energy consumers into new territory on the frontier of controlling carbon emissions.

Representatives of the big power companies are flooding Washington, D.C., in a desperate effort to mitigate the impact of the EPA’s venture, known as the Clean Power Plan.

Debates between environmental activists and politicians over its implications are heating up.

But few have looked at the EPA’s new carbon plan with quite the riveted sense of alarm as small utility companies that serve rural customers.

The president of a small cooperative serving rural customers in Arizona, New Mexico and Nevada is blunt about that impact:

“The people throughout rural Arizona that we serve will be screwed more than anybody else in the country,” Patrick Ledger, CEO of the Arizona Generation and Transmission Cooperatives, told the Environment and Energy news service.

Unless the EPA’s plan includes substantial revisions, Ledger is not exaggerating.